The ferrous complex was firm on July 18, 2022:
I have no faith in this rally at all. Lower ahead.
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In news, there is this:
China is planning a state-backed iron ore company to oversee everything from massive mine investments in West Africa to buying the steelmaking material from global suppliers, according to people familiar with the matter.
Top leaders in Beijing have a vision for the new entity to assume broad responsibility for raw materials supplies to the country’s sprawling steel industry, by far the world’s biggest, said the people, who asked not to be identified as the information is private.
This won’t matter until it does and then it will matter a lot. The key will be an overall market weakness which will boost the power of such an entity enormously.
But not yet!
Chinese-led Winning Consortium Simandou (WCS) has put workers on forced leave with the prospect of layoffs if a dispute with Guinea’s government over infrastructure for a massive iron project is not resolved, three sources told Reuters.
Guinea’s mines minister on July 3 ordered all work on the Simandou project – the world’s largest undeveloped iron ore deposit – to stop after WCS and Rio Tinto missed an extended deadline to agree on a joint venture with the government. That joint venture is intended to cover the rail and port infrastructure the companies will use to export the iron ore.
WCS forced workers to take one month’s leave, and if the project has not restarted after that, they will be laid off, one employee said, adding that the order to stop work came through at the last minute.
With Chinese demand cooked and supply set to boom, iron ore is entering a true dark age.